Alliance Resource Partners, L.P. Completes Acquisition of Oil and Gas Mineral Interests
August 02 2019 - 3:21PM
Business Wire
Alliance Resource Partners, L.P. (NASDAQ: ARLP) today announced
that it has completed the previously announced acquisition of oil
and gas mineral interests from Wing Resources, LLC and Wing
Resources II, LLC (collectively, "Wing") for a cash purchase price
of $145.0 million. The transaction increases ARLP’s presence in the
Permian Basin through the addition of approximately 9,000 net
royalty acres in the Midland Basin with exposure to more than
400,000 gross acres. The effective date of the transaction is May
1, 2019.
There are 827 gross horizontal wells currently producing on the
newly acquired acreage delivering estimated net production of over
500 BOE per day (71% oil, 14% NGLs). With an additional 405 drilled
but uncompleted wells and 298 permits, these assets are under
active development by well-capitalized operators bringing visible
and near-term growth to current production.
"Today’s announcement reflects ARLP’s commitment to build its
oil and gas minerals segment as a strategic growth platform," said
Joseph W. Craft III, Chairman, President and Chief Executive
Officer. "The Wing acquisition enhances our already significant
ownership position in the prolific, liquids-rich Permian Basin.
Combined with our other minerals assets, we expect the organic
growth of our minerals segment to provide meaningful EBITDA and
cash flow contributions within the next two years. Continued
disciplined acquisitions will further enhance the long-term cash
flow growth for ARLP and create value for our unitholders."
ARLP now directly owns approximately 51,000 net royalty acres
concentrated in the Permian Basin (47.0%), SCOOP/STACK (40.0%),
Bakken (8.0%) and Appalachian Basin (5.0%). ARLP also indirectly
owns approximately 4,000 net royalty acres through its limited
partner interest in AllDale Minerals III, LP. With the acquisition
of these mineral interests from Wing and changes to our previous
guidance to include liquids volumes, ARLP expects 2019 Segment
Adjusted EBITDA contribution in the range of $48.0-$54.0 million
with production net to ARLP of 4,500-4,700 BOE per day.
Evercore acted as exclusive financial advisor to ARLP with
respect to this transaction. TenOaks Energy Advisors acted as
exclusive financial advisor to Wing with respect to this
transaction.
About Alliance Resource Partners, L.P.
ARLP is a diversified natural resource company that generates
income from coal production and oil and gas mineral interests
located in strategic producing regions across the United
States.
ARLP currently produces coal from eight mining complexes it
operates in Illinois, Indiana, Kentucky, Maryland and West
Virginia. ARLP also operates a coal loading terminal on the Ohio
River at Mount Vernon, Indiana. ARLP markets its coal production to
major domestic and international utilities and industrial users and
is currently the second largest coal producer in the eastern United
States.
ARLP generates royalty income from mineral interests it owns in
premier oil and gas producing regions in the US, primarily the
Anadarko, Permian, Williston and Appalachian basins.
In addition, ARLP also generates income from a variety of other
sources.
News, unit prices and additional information about ARLP,
including filings with the Securities and Exchange Commission, are
available at http://www.arlp.com. For more information, contact the
investor relations department of ARLP at (918) 295-7674 or via
e-mail at investorrelations@arlp.com.
FORWARD-LOOKING STATEMENTS: With the exception of historical
matters, any matters discussed in this press release are
forward-looking statements that involve risks and uncertainties
that could cause actual results to differ materially from projected
results. These risks, uncertainties and contingencies include, but
are not limited to, the following: changes in coal prices, which
could affect our operating results and cash flows; changes in
competition in domestic and international coal markets and our
ability to respond to such changes; legislation, regulations, and
court decisions and interpretations thereof, both domestic and
foreign, including those relating to the environment and the
release of greenhouse gases, mining, miner health and safety and
health care; deregulation of the electric utility industry or the
effects of any adverse change in the coal industry, electric
utility industry, or general economic conditions; risks associated
with the expansion of our operations and properties; our ability to
identify and complete acquisitions; dependence on significant
customer contracts, including renewing existing contracts upon
expiration; adjustments made in price, volume or terms to existing
coal supply agreements; changing global economic conditions or in
industries in which our customers operate; recent action and the
possibility of future action on trade made by United States and
foreign governments; the effect of new tariffs and other trade
measures; liquidity constraints, including those resulting from any
future unavailability of financing; customer bankruptcies,
cancellations or breaches to existing contracts, or other failures
to perform; customer delays, failure to take coal under contracts
or defaults in making payments; fluctuations in coal demand, prices
and availability; changes in oil & gas prices, which could,
among other things, affect our investments in oil & gas mineral
interests; our productivity levels and margins earned on our coal
sales; decline in or change in the coal industry's share of
electricity generation, including as a result of environmental
concerns related to coal mining and combustion and the cost and
perceived benefits of other sources of electricity, such as natural
gas, nuclear energy and renewable fuels; changes in raw material
costs; changes in the availability of skilled labor; our ability to
maintain satisfactory relations with our employees; increases in
labor costs including costs of health insurance and taxes resulting
from the Affordable Care Act, adverse changes in work rules, or
cash payments or projections associated with post-mine reclamation
and workers' compensation claims; increases in transportation costs
and risk of transportation delays or interruptions; operational
interruptions due to geologic, permitting, labor, weather-related
or other factors; risks associated with major mine-related
accidents, mine fires, mine floods or other interruptions; results
of litigation, including claims not yet asserted; foreign currency
fluctuations that could adversely affect the competitiveness of our
coal abroad; difficulty maintaining our surety bonds for mine
reclamation as well as workers' compensation and black lung
benefits; difficulty in making accurate assumptions and projections
regarding post-mine reclamation as well as pension, black lung
benefits and other post-retirement benefit liabilities;
uncertainties in estimating and replacing our coal reserves;
uncertainties in estimating and replacing our oil & gas
reserves; uncertainties in the amount of oil & gas production
due to the level of drilling and completion activity by the
operators of our oil & gas properties; a loss or reduction of
benefits from certain tax deductions and credits; difficulty
obtaining commercial property insurance, and risks associated with
our participation in the commercial insurance property program; and
difficulty in making accurate assumptions and projections regarding
future revenues and costs associated with equity investments in
companies we do not control.
Additional information concerning these and other factors can
be found in ARLP's public periodic filings with the SEC, including
ARLP's Annual Report on Form 10-K for the year ended December 31,
2018, filed on February 22, 2019 and ARLP's Quarterly Report on
Form 10-Q for the quarter ended March 31, 2019, filed on May 6,
2019 with the SEC. Except as required by applicable securities
laws, ARLP does not intend to update its forward-looking
statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20190802005474/en/
Brian L. Cantrell Alliance Resource Partners, L.P. (918)
295-7673
Alliance Resource Partners (NASDAQ:ARLP)
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